Types of investments

Types of investments

Investment is the process of spending your money on an asset that might have good returns in the future. Investment is not about money it is also about having a secure future. A proper investment will definitely be of great help during the times of financial crisis. Here are some types of investment.

Stocks

Purchasing stocks refer to owning a very small portion of that particular company. The value of the stock is decided by size of the company, its type, the performance and a lot more. When it comes to stocks, there are ones that give you benefits in a short span of time, and there are ones that have good growth in the long term. One of the important aspects of stocks is that you need to do a lot of research before investing in them. Even though one can make it big with stock investments, there are huge risks involved.

Bonds

A bond refers to the money loaned by the investor to a person or an organization in exchange for interest over a particular time period. The repayment from the person or the organization includes the interest plus the principal amount. Bonds are one of the best ways of investment. There are just two things that need to be given more importance while investing in bonds. You need to make sure that the person or the organization is reliable and it is mandatory that you need to take a close look at the documents and make sure that there is no hidden clause.

Investment Funds

Investment funds refer to mutual funds, closed-end funds, and exchange-traded funds. The strategy involved in this method is that the investment experts gather money from many investors and invest it in areas where there are good possibilities for gaining benefits. The profit that is gained is shared between the investors and the person operating the funds.

Bank Products

Banks can offer the safest and a risk-free way for investment like fixed deposits and so on. All you need to do is put your money in their account, and you can get a yearly interest of a certain percentage. The percentage varies from bank to bank. It is without second thoughts the easiest way to manage your hard-earned money.

Annuities

An annuity is a contract between an individual and insurance company. It is a process in which the company offers to make periodic payments. If the payment starts immediately, it is called an immediate annuity. If the payment procedure starts somewhere in the future, then it is called a deferred annuity.

Commodity Futures

Commodity futures are agreements and license to sell or buy commodities of a specific quantity and specific price within a particular date. The commodities include metals, oil, grains, and currencies. Every trading process in the future contracts should be performed on the floor of a commodity exchange.